EBRD cuts GDP growth forecast for Albania and the region – Release
The consequences of Russia’s war in Ukraine will slow down economic growth in Albania and the region according to the last report by the European Bank for Reconstruction and Development.
The Albanian economy is expected to grow by 3.3% in 2022, compared to 3.7% forecast by the EBRD in November 2021.
“Growth is expected to slow to 1.7% in 2022, a downward revision of 2.5 percentage points from the forecast made in November 2021, as Russia’s invasion of Ukraine had a profound impact on the economies of EBRD regions as well as globally,” according to the report.
The global reliance on Russia and Belarus for a disproportionately large number of commodities has disrupted supply chains, driving up prices everywhere, especially fuel prices.
While the report finds that all Western Balkan countries would be affected by rising oil and gas prices, it argued that “North Macedonia and Albania are more exposed than others to an increase in oil and gas prices. price of electricity because they import a much higher quantity of electricity than they export”. .”
Furthermore, the EBRD concluded that “inflationary pressures have been greater in low-income economies where food (such as cereals or maize) and energy account for a higher share of consumption.”
Since February, fuel and food prices have skyrocketed in Albania, leading to a steady stream of protests from Albanian citizens.
In response, Prime Minister Edi Rama’s government unveiled a 7-point ‘social resistance’ package, but citizens say these measures are not enough.
Rama has also created a transparency board to monitor fuel prices. The council sets the price for a period of several days for all oil and gas stations.
Nevertheless, the price decided by the board over the past few weeks has remained continuously above the 2021 average.